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Suppose a consumer has the utility function u(x;y) = xy1/2. Suppose the prices and income are given as Px = $2;Py = $3; I=$900:

a) Draw the budget line.

b) Find MRS. Is it diminishing?

c) Draw the optimal Bundle

d) Draw the Engel curve for good.

Macroeconomics, Economics

  • Category:- Macroeconomics
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